Bitcoin Defends Price Support, But Bear Case Still Intact

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  • Bitcoin’s repeated protection of the 100-day transferring common alerts vendor exhaustion, however a break above $10,445 – the excessive of Thursday’s hammer candle – is required to verify a bull revival.
  • A high-volume transfer above $10,445 would open the doorways to re-test of $11,120.
  • BTC might have a troublesome time scaling $10,445, because the every day chart indicators are biased bearish.
  • The chance of a drop to $9,049 (July 17 low) stays so long as costs are held under that stage.

Bitcoin (BTC) has bounced from key worth assist, however the outlook stays bearish so long as costs maintain under Thursday’s excessive of $10,445.

The main cryptocurrency by the market worth discovered takers close to the extensively adopted 100-day transferring common (MA) at $9,700 earlier right now, however at time of writing had regained floor to round $10,060, in accordance with Bitstamp knowledge.

Sellers had managed to breach the 100-day MA within the early European buying and selling hours on Thursday, however the breakdown was short-lived and BTC ended the day with 2.78 p.c good points at $10,301.

In technical phrases, the cryptocurrency created a long-tailed hammer candle on Thursday, implying vendor exhaustion close to the 100-day MA.

The restoration from the 100-day MA assist seen right now has additional confirmed the weakening of bearish momentum.

A brief-term bullish reversal, nevertheless, could be confirmed provided that consumers make their presence felt right now, pushing costs above Thursday’s excessive of $10,445. That will validate the vendor exhaustion signaled by Thursday’s long-tailed hammer candle.

Lengthy-tailed every day candles have constantly reversed pullbacks within the current previous, as seen within the chart under. So, there’s a historic case to be made for a worth rise above $10,445 right now. That mentioned, extensively adopted technical indicators proceed to name a bearish transfer.

Each day chart

Bitcoin’s pullback from the June 26 excessive of $13,880 ended with the cryptocurrency forming a long-tailed bullish hammer on July 2.

On related strains, July 17’s long-tailed candle marked an finish of the pullback from the July 10 excessive of $13,200 and was adopted by an increase to $11,120. Once more, the cryptocurrency created a long-tailed doji on July 28, earlier than rising to highs above $12,000 on Aug. 6.

So, if historical past is a information, the cryptocurrency might put up a powerful follow-through to yesterday’s bullish hammer candle.

Nevertheless, technical indicators are biased bearish: the 5- and 10-day MAs are trending south, the 14-day relative power index (RSI) is hovering under 50 and the MACD is producing decrease lows under the zero line.

Going by the symptoms, the cryptocurrency might have a troublesome time printing the required (for the bulls) UTC shut above Thursday’s excessive of $10,445.

Hourly chart

BTC witnessed a rising wedge breakdown earlier right now. That bearish continuation sample marked an finish of the bounce from yesterday’s low of $9,467 and a resumption of the sell-off from current highs above $12,000.

That sample continues to be legitimate, which means the trail of least resistance is to the draw back.

Moreover, the bounce seen in the previous couple of hours is just not backed by robust shopping for volumes (inexperienced bars) and may very well be short-lived.

All-in-all, the cryptocurrency seems prone to stay on monitor to check the $9,049 (July 17 low). Acceptance under that stage would verify a bearish reversal on the month-to-month chart, as mentioned earlier this week.

Disclosure: The creator holds no cryptocurrency property on the time of writing.

Bitcoin picture through Shutterstock; charts by Buying and selling View

About Tom Greenly

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